Freelancers Vs Employees: When To Hire Whom

Freelancing has become a popular career choice for a lot of people, and a lot more are taking to it as a side hustle to make some extra money. This means businesses have a huge talent pool to choose from to handle specific aspects of their operations, such as design work, content generation and even aspects of software development.

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However, just because hiring freelancers is more affordable than hiring a full time employee, they may not always be the best choice. How do you decide when you need to hire freelancer contractors and when you should hire a full time employee?

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Let’s make it easier for you to decide by delving into the factors that you ought to consider before hiring either of them.

When to hire freelancers

Here are some of the situations when hiring a freelancer makes the most business sense.

Scope of work

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Very often, you need something done only once, or maybe sporadically a few times in a year. For example, you aren’t going to be redesigning your logo every week. That is a branding decision that you make once and build your business around. 

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Similarly, if, for example, you run a boutique, you may not have the time or the skills to write blog content and optimize it for search engines to market your business on the internet as well as on social media platforms.

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In the first case, the task is not something you’d need done repetitively, while in the second case, the scope of work is outside of your expertise, but may not warrant hiring a full time resource to do it. Both of these are good examples of when you ought to work with freelancers.

Budget

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Hiring a full time employee comes with more costs than just their salaries. In contrast, paying a freelancer a higher hourly rate may often work out to be more affordable, especially if the engagement is not long term.

Risk mitigation

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Along with the reduced cost of hiring freelance contractors as compared to full time employees, there is also reduced risk involved. If you find working with a freelance resource to not be to your liking, you aren’t obligated to them by a long term contractual agreement to continue that engagement.

Commitment issues

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Sometimes, you may not be sure if a person will be a good fit with your team as a full time employee, or if the person actually has the skills and capabilities they claim to possess. In these cases, it may be easier for you to hire them as a freelancer to test the waters before you make a full time commitment. 

Advantages of hiring freelancers

Here are some of the definite advantages of choosing freelancers for hire instead of employees.

Lower cost

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When you hire a full time employee, you take on extra costs, such as training them, paying for their Medicare, social security and handling their taxes. Freelancers may charge a higher hourly rate, but since there aren’t any other costs involved and the duration of the engagement will be shorter, they tend to be the more affordable choice, 

Reduced risk of legal issues

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Hiring freelance resources greatly lowers the risk of being sued for mistreatment or harassment as compared to employees. Of course, that isn’t an indication that freelancers can be treated poorly. 

No commitment

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You aren’t legally bound to a term with freelancers in most cases. If you aren’t happy with the services of one, you can simply terminate the engagement with an email and find another resource. Once the project you hired the freelancer 

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Even if you suddenly incur unexpected expenses and need to scale down your operations, parting ways with freelancers is easier than firing employees. 

Specialized skill set

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If you have a need for a specialized skill set, like building a mobile app, for example, the right freelancer will be able to deliver exactly what you need at a fraction of the cost it would take for you to employ someone full time for the same project. 

Access to more talent

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When you choose to work with freelance contractors, you get access to an endless pool of talent from around the globe to choose from. In a lot of cases, hiring a freelancer from another part of the world may cost you less than hiring one locally.

When to hire employees

Just like there are situations that warrant hiring freelancers, here’s when you’re better off hiring full time employees.

No budget constraints

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If you have the budget to hire and nurture an in-house team, hiring employees definitely makes more sense.

Prolonged engagement

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If the roles you're hiring for are for long term engagements, it makes more economic and business sense to hire full time employees instead of engaging freelancers, especially since freelancers may not always be available and are likely to charge you a higher hourly rate.

Work culture

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If you’re looking to build a team that embodies the values of your business, has camaraderie and shares a common vision, you need to hire employees and instill those values in them.

Advantages of hiring employees

Hiring full timers has its own distinct advantages. Here are some of the benefits of choosing employees over freelancers.

Attention to detail

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A freelancer is only going to look at the project they’re working on as a one-off task, and will finish it as quickly as they can and move on. Furthermore, freelancers don’t fall under your direct scope of control, and tend to work remotely. 

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When you need a task to be done that needs in-depth focus and attention to detail, you’re better off entrusting it to an employee. Not only will you be able to monitor their progress better, you can expect them to attend to it with more diligence. 

More commitment to the organization

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Your business is just one of the many clients a freelancer will work with, and as such, he/she cannot be expected to be invested in the overall success of your business. They will, after all, move on to their next client as soon as their engagement with you is done.

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A fairly paid full timer, on the other hand, is more likely to understand and share the vision you have for your business. They are more likely to be invested emotionally in seeing their team and the business succeed because that directly translates into a better future for them as well.

Better work culture

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Without full time employees, you will be unable to nurture the type of work culture that attracts talented resources with the drive to reach their goals. 

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In a lot of cases, hiring freelancers repeatedly can damage that culture, leaving employees feeling underutilized and demoralized. 

How to decide whom to employ

Deciding whether you need to hire freelancers or employees depends entirely on what your business needs. For example, if you’re a new company running on a tight budget, you may find it more affordable to hire freelancers until you stabilize.

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On the other hand, building a team of employees will help your business lay down roots and grow more easily, just as long as you can afford the team.

Irrespective of which you choose, Prio has tools for you

Whether you choose freelancer or full timers, certain needs overlap, and Prio has just the tools to address those needs.

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If you want to track whether the number of hours your freelance resource takes to complete a project justifies the hourly rate you’re paying, Prio’s time tracker is just the tool for you. The same tool can help you track your team’s productivity, even if they’re working remotely.

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Similarly, our invoice generator can be used by both your in-house team and the freelancers you work with to automate the creation of monthly invoices, while our resume builder is perfect for you to build employee showcase resumes to present to your clients.

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Sign up on Prio’s website today to discover a suite of tools built for freelancers and SMBs.